Cape Town – The minority shareholders in the Takatso Consortium have agreed to the Competition Commission’s condition that they exit the strategic equity partnership with South African Airways (SAA) for the deal to proceed.
The minority shareholders are now in the process of appointing a corporate advisor with experience in global aviation deals to help assess potential buyers, determine the fair value of the business, and assist with the legal process, News24 reported on Tuesday.
“We will use our best endeavours to sell our minority stake, but obviously the outcome cannot be guaranteed.
“It’s a pity. We really wanted to play a meaningful role in a successful privatisation in this country,” the report quoted Gidon Novick, who represents the minority shareholders as saying.
The consortium, consisting of Harith, Global Aviation, and Syranix, will acquire a 51% stake in SAA and inject R3 billion into the airline over two years, the report said.
The Department of Public Enterprises will retain a 49% stake.
The minority shareholders are disappointed to leave the deal but are committed to selling their stake, said the report.
The Competition Tribunal hearing is expected to take place in June.
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SAA entered business rescue in December 2019, emerged in April 2021, and restarted commercial flights in September 2021.
The Takatso deal is seen as crucial for SAA’s financial recovery without relying on further government bailouts.
Last month, SAA’s interim CEO John Lamolasaid the company is expected to report an operating profit for the 2022/2023 financial year.
Although the exact amount is not yet known, Lamola described it as historic and a significant achievement for SAA.
The company’s draft annual financial statements will be presented to the board and auditors before being made public at the end of June.
SAA’s financial statements have not been audited since 2018, but the auditing process for the 2019-2022 financial years is set to be concluded by the end of June, Lamola said while appearing before Parliament’s standing committee on public accounts (Scopa).
The audit has been complicated due to SAA’s subsidiaries and the absence of management support for Mango, which is under business rescue.
SAA has expanded its market, adding new routes and destinations.
The company aims to reach 20 destinations, including one intercontinental destination, by March 2024 and is looking to lease six additional aircraft to double its fleet.
South African Airways turned a ‘modest yet substantial profit’ in the last financial year.
This is according to SAA CEO John Lamola.
Lamola told SCOPA today that embattled SAA is on a resurgence notwithstanding SAA not publishing financials for the last 4 years.#TheLegalSA pic.twitter.com/9pJiQ0yg59
— The Legal SA (@TheLegalSA) May 30, 2023
The positive indicators suggest that SAA is on the path to recovery and fulfilling its obligations to its strategic equity partner.
“All indicators are positive that the business is recovering to a level where the shareholder will be able to fulfil the obligation made in the memorandum of understanding with the strategic equity partner that we are delivering a capable airline, an airline that is just waiting to be scaled up,” Times Live quoted Lamola as saying.
The airline’s new interim board chairperson Derek Hanekom is also upbeat about the modest profit that the airline made.
Hanekom agreed that an equity partner is necessary, EWN reported.
“Should anything go awry and it should not go through, the airline will not collapse. I can give you that assurance. It simply means growth will be held back,” Hanekom said, according to the report.
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Compiled by Betha Madhomu
